OneTaskBy Tim King · Updated
Rental Yield Calculator
Gross and Net Rental Yield From Price, Rent, Vacancy and Running Costs
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How the Rental Yield Calculator works
This rental yield calculator works out the gross and net yield on an investment property. Enter the price and the rent, weekly, fortnightly or monthly, and add vacancy, the management fee and other yearly costs to see the net yield and the income left over.
Rental yield calculator formula
Gross yield is a year's rent divided by the price. Net yield takes off vacancy, the management fee and running costs first:
Gross yield = yearly rent ÷ price × 100 Net yield = (rent collected − management fee − costs) ÷ price × 100
Running costs are things like rates, insurance, maintenance, strata or body corporate fees and landlord insurance. Loan repayments are not included; the property cash flow calculator adds those.
Worked example: a weekly rent
A 500,000 property rents for 500 a week, 26,000 a year, a gross yield of 5.20%. Two vacant weeks leave 25,000 collected. A 7% management fee takes 1,750 and costs are 5,000, so net income is 18,250 and the net yield is 3.65%.
Worked example: a monthly rent
A 400,000 apartment rents for 2,000 a month, 24,000 a year, a gross yield of 6.00%. Self-managed with no vacancy and 4,000 of costs, net income is 20,000 and the net yield is 5.00%.
Rental yield reference table
Gross yield by weekly rent on three property prices.
| Weekly rent | On 500,000 | On 750,000 | On 1,000,000 |
|---|---|---|---|
| 300 | 3.12% | 2.08% | 1.56% |
| 350 | 3.64% | 2.43% | 1.82% |
| 400 | 4.16% | 2.77% | 2.08% |
| 450 | 4.68% | 3.12% | 2.34% |
| 500 | 5.20% | 3.47% | 2.60% |
| 550 | 5.72% | 3.81% | 2.86% |
| 600 | 6.24% | 4.16% | 3.12% |
| 650 | 6.76% | 4.51% | 3.38% |
| 700 | 7.28% | 4.85% | 3.64% |
| 750 | 7.80% | 5.20% | 3.90% |
| 800 | 8.32% | 5.55% | 4.16% |
| 850 | 8.84% | 5.89% | 4.42% |
| 900 | 9.36% | 6.24% | 4.68% |
| 950 | 9.88% | 6.59% | 4.94% |
| 1,000 | 10.40% | 6.93% | 5.20% |
| 1,050 | 10.92% | 7.28% | 5.46% |
| 1,100 | 11.44% | 7.63% | 5.72% |
| 1,150 | 11.96% | 7.97% | 5.98% |
| 1,200 | 12.48% | 8.32% | 6.24% |
| 1,250 | 13.00% | 8.67% | 6.50% |
Quick answers
- 400 a week on 400,000 is a 5.2% gross yield.
- 2,500 a month on 600,000 is a 5.0% gross yield.
- Each vacant week cuts the rent collected by about 2%.
- A 5% gross yield often ends up 3 to 4% net.
- A higher price with the same rent always means a lower yield.
- Divide the price by a year's rent to see how many years of rent it costs: 500,000 at 26,000 is about 19 years.
FAQ
What is a good rental yield?
It depends on the market and the property. Houses in large cities often yield less but grow more in value, while regional properties and units often yield more. Compare net yields, since costs differ a lot.
Should I use the purchase price or today's value?
Use the purchase price, plus buying costs if you like, to judge your own return. Use the current value to compare the property against selling and investing elsewhere.
What is the difference between gross and net yield?
Gross yield uses rent alone. Net yield subtracts vacancy, fees and running costs, so it is closer to the return you actually receive before loan costs.
See also: all Property tools, Pay, Bills, Debt, Investing, Saving.
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